The United Kingdom will need a new most favored nation tariff regime as early as January 2021 when the current Brexit transition could come to an end and is calling on businesses, consumers, and others to advise which tariffs should be eliminated or reduced.
The EU’s Common External Tariff, which currently applies to all imports into the UK from non-EU countries, will essentially be marked up to create the new UK Global Tariff (UKGT). Guiding principles for the UK’s forthcoming independent trade policy already are enshrined in UK law and focus on the interests of UK consumers and producers and the general promotion of free trade.
The UK proposes to simplify and tailor tariffs in the interest of UK businesses and households by:
- Eliminating “nuisance tariffs”, i.e., tariffs of less than 2.5%, to reduce administrative burden on business;
- Rounding other tariffs down to the nearest standardized 2.5%, 5% or 10% band to make the system easier for businesses to use; and
- Removing tariffs on key inputs to production or where the UK has zero or limited domestic production to reduce costs for UK manufacturers and lower prices for consumers.
Conveniently, the UK has created interesting menus of goods for which there may be reduction or elimination of tariffs. These lists include:
- Broad Economic Categories, such as valves; pulleys and flywheels; graphite electrodes; aluminum, copper, and various iron and steel products; and parts for metal-rolling mills;
- Tariff Suspensions, such as mushrooms; valves; polyethylene terephthalate (PET); and iron, steel, and stainless steel products; and
- Inward Processing, such as PET; valves; and iron, steel, aluminum, and titanium products.
The foregoing proposals are not exhaustive, however. Suggestions are invited for other goods that should be considered as candidates for reduced or removed tariffs. The UKGT will apply to all goods imported into the UK from 1 January 2021 (or a later date if the UK and EU agreed to extend the transition period) except for goods from developing countries under the WTO Generalised Systems of Preferences or those governed by the free trade agreements the UK expects to negotiate in the coming months.
Stakeholders have until 5 March 2020 to send in their wish lists.